Get Ready for the New Lease Accounting Rules
FASB and IFRS changes will cause challenges for companies with fragmented information on equipment leases. Here’s how to prepare.
Read an Excerpt
They might not admit it, but if you were to ask treasurers and controllers of public companies how many leases their organization has, most of them likely wouldn’t know. If you then asked how they generate their future payment obligations in their notes disclosures, they would probably change the subject.
Until now, corporate finance executives haven’t felt a burning need to manage their equipment lease portfolio — in part because the current lease accounting standard treats operating leases as expenses that have to be reported only in financial statement footnotes. Accountants and auditors alike have focused on higher-risk compliance items. With limited time and resources, controllers and audit committees are always prioritizing, and leasing has usually not made the cut. That’s about to change. Read the full article.